George Osborne and John McDonnell. The shadow chancellor argued that it was sensible to borrow to invest when borrowing costs were low [Image: EPA/PA].

McDonnell is right and Osborne is wrong. It’s that simple.

George Osborne is “getting his excuses in early” for economic failure, the shadow chancellor, John McDonnell, has argued, saying he warned his opposite number about global economic threats to the UK economy months ago.

McDonnell was responding to a speech by the chancellor on Thursday in which he said the UK economy faced a “dangerous cocktail of new threats” from abroad, including the falling Chinese stock market and instability in the Middle East.

“I was warning in my first speeches as the shadow chancellor three months ago … of the global problems that we would be experiencing,” McDonnell said on BBC Radio 4’s World at One. “That’s why you need to get your own economy right so you can stand against those problems – those heavy winds that will hit us.”

Osborne told an audience in Cardiff that the turmoil in financial markets – which saw 5% wiped off oil prices on Wednesday – should act as an antidote to the “creeping complacency” about reducing the deficit.

McDonnell said: “The reality is this: [Osborne’s] programme was meant to ensure that we had actually tackled the deficit by this year, eliminate it completely. But we are now going into a situation where the deficit is actually increasing this year, well beyond possibly £10bn.

“What we’re saying is exactly what George Osborne should have done five years ago, which is that you invest. You invest in your infrastructure, you invest in skills, you rebalance your economy and make sure your manufacturing base is working again and then you can stand against the global headwinds that hit you.

“[Osborne has] failed to do that. We’re now facing about £1.5tn of debt, the deficit is increasing, and consumer credit is now rising dramatically.”

Source: George Osborne ‘getting his excuses in early’ for economic failure, says Labour | Politics | The Guardian

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